Adding a new cart: Flipkart may employ eBay to sell used goods

Flipkart’s entry into the online second-hand products business will pit it directly against QuikrBazaar and OLX in a largely unorganised marketMugdha Variyar&Varsha Bansal | ET Bureau | September 26, 2017, 09:13 IST

Flipkart is finalising another use for eBay India after deciding to employ it as a global sales platform for its thousands of vendors — to sell used or refurbished products.

India’s largest online marketplace will primarily use eBay India, which it recently acquired, to sell used goods it receives from customers through its product exchange offers and buyback guarantee schemes, according to three people aware of the company’s plans.

Flipkart’s entry into the online second-hand products business will pit it directly against QuikrBazaar and OLX in a largely unorganised market. Amazon India already sells refurbished mobile phones as well as allows customers to sell used products through its platform directly. “Flipkart is exploring several possibilities to leverage the eBay India platform and is not being restrictive to a category or a line of business,” a Flipkart spokesman said by email.

Flipkart had said during its acquisition of eBay.in that the platform would be leveraged for cross-border trade, a move designed to give Flipkart’s vendors access to eBay’s global customers and Flipkart’s customers access to eBay’s global inventory of products.

Flipkart’s repurposing of eBay.in as a platform for used goods ties in with its several initiatives to drive sales.

For instance, during its just-concluded Big Billion Days sale, one in four customers who bought premium smartphones on day one of sales in the category did so with its buyback guarantee scheme, according to the company. That would potentially leave Flipkart with a large number of second-hand smartphones when those customers decide to use the guarantee, which can potentially be sold through eBay.in after refurbishing.

Flipkart sold 1.3 million smartphones within the first 20 hours of the category opening for sale.

Flipkart currently works with vendors under its scrap ecosystem to circulate used products that it receives from customers.

The plan is to refurbish and sell such products on eBay.in eventually, said one of the three people cited above. All of them declined to be identified.

eBay India, which remains an independent entity, already has a section called Reboxed through which it sells refurbished mobile phones, electronics, home appliances and other products.

Some analysts and industry experts are skeptical about Flipkart’s potential entry into the second-hand products business as the market is largely unorganised and tough to crack.

Refurbished furniture and appliance marketplace GoZefo’s founder Rohit Ramasubramanian said the business of accepting a used product, repairing it and making it re-sellable is a complicated process. “The second-hand car market is bigger than the new car market. But that is not the same with other products.”

“If Flipkart wants to sell refurbished products, it might as well sell it on the Flipkart platform, similar to what Amazon India is doing,” said an analyst tracking the ecommerce sector. “This might be (Flipkart’s) way of keeping eBay India running.”

Some others, though, cheered what they said was a good strategy to capture a largely untapped market.

“Just like how (the Flipkart Group is) trying to position Myntra and Jabong differently, since they have bought eBay, it is obvious that they would have an independent plan for eBay India different from what the Flipkart platform is doing,” said Harminder Sahni, managing director of consulting firm Wazir Advisors.

“If they are going with a model which makes them compete with OLX and QuikrBazaar, it is a clear game and there is a market for this.”

eBay India, which was renamed as Mint-Kart in July, clocked revenue of Rs 391 crore and a loss of Rs 171 crore for fiscal year 2016-17, according to regulatory filings shared by data tracking firm Tofler.

Flipkart took over eBay.in after the two companies concluded a merger announced in April as part of a deal that saw the Indian ecommerce company raising $1.4 billion in funding from eBay, Microsoft and Tencent. eBay made a $500-million cash investment in Flipkart for an equity stake and sold eBay.in to Flipkart.

eBay entered the Indian market in 2004 and began operations through the acquisition of News Corp-backed Bazee.com, but struggled to make a mark in a market dominated by Flipkart and Amazon India. The company picked up significant stake in Delhi-based online retailer Snapdeal in 2013, a part of which it still holds.